July 12, 2006

Rising prescription drug costs, especially for the uninsured, point to the need for a more vibrant generic drug market and more active state price negotiations, an activist group concluded in a recent report.

U.S. Public Interest Research Group (PIRG) released a report analyzing drug prices for insured and uninsured Americans. The report was released at a July 11 press conference attended by Rep. Ed Markey (D-Mass.).

PIRG argues that the report's findings that uninsured Americans pay 60 percent more for prescription drugs than companies charge the federal government and that drug prices have increased at a higher rate than inflation over the last two years justify numerous changes to federal and state law. The group surveyed more than 600 pharmacies in 35 cities to determine how much uninsured consumers pay for 10 drugs as compared with prices paid by the federal government.

But industry rejects the report as merely an effort to "make headlines," PhRMA said in a statement. The study is a "rigged comparison," assessing two very different markets to reach an inaccurate conclusion. Government negotiations, such as those by the Veterans Administration (VA) and the private market, are too different to provide an accurate cost comparison, the group said. For example, the VA's prices exclude all costs for distribution, including pharmacy costs, that companies include in the prices they charge the public.

PhRMA instead recommends its program, the Parnership for Prescription Assistance (PPA), as a means to help the uninsured. PPA provides medicine for free or at severely reduced prices to qualified consumers.

Among the changes PIRG recommends in the report, "Paying the Price: The High Cost of Prescription Drugs For Uninsured Americans," are legalizing drug importation, limiting direct-to-consumer advertising and increasing transparency in drug negotiations between companies and pharmacy benefit managers. But the group will focus its lobbying efforts on other, less controversial recommendations, such as establishing state drug-buying pools and increasing funds for the FDA's Office of Generic Drugs (OGD), Paul Brown, a consumer advocate for PIRG, said.

"Getting generic drugs on the market faster and forming buying pools are common sense solutions that will almost immediately lower prescription drugs costs to the millions of hard-working Americans who are uninsured or underinsured," Brown said in a statement.

Increased OGD funding and drug-buying pools are more likely to succeed because they are less controversial and have "more momentum" at the state and federal level than the other recommendations, Brown said. Federal lawmakers on both sides of the aisle have supported increased OGD funding. Also, many states are already in the process of establishing buying pools, Brown added. (http://www.fdanews.com/did/5_135/)